While overtime rules look simple on paper, applying them in the real world can often be difficult. Consider these three typical scenarios, each of which requires a compensation decision. Do you answer each one correctly?

Scenario 1: You require Sue, a nonexempt clerk, to attend a convention in a distant city. Is her travel time compensable?

Answer: Maybe. If Sue travels during normal work hours her time is compensable. If she travels during off hours, her time is not compensable and does not have to be counted as overtime. The exception, though, is if Sue works while she travels, even if the nature of that work differs from her usual principle work activity. “As long as someone is performing work related to their job, their time is compensable and you have to pay them,” says James B. Sherman, President and CEO of Wessels Sherman, a Chicago-based employment law firm (w-p.com). 

Scenario 2: You require Bob, a nonexempt sales person, to attend a four-hour educational seminar one evening. Because Bob is only required to sit and listen to what the speakers say, his attendance does not seem to directly relate to his principal work activity of selling. Are those four hours compensable?

Answer: Yes. “If you mandate that Bob attend, then the time is compensable because the employee is doing the bidding of the employer,” says Sherman. “It makes no difference whether the activity seems to be directly related to the employee’s principal work activity.”

Scenario 3: Rodriguez, a nonexempt administrative assistant, volunteers to go to a business seminar, attendance at which is not required by his employer. The seminar is held outside his hours of work. Is Rodriguez’s time compensable?

Answer: Maybe. “If the seminar is related to the employee’s position, then it’s compensable,” says Sean F. Darke, a senior attorney at Wessels Sherman. If the topic of the seminar is not related, and the employee did not perform any productive work during the seminar, then attendance is not compensable.

If seminar time is deemed compensable, then the individuals must be paid overtime if attendance puts them over their 40-hour weekly limit. “You can avoid paying them overtime, though, by having them reduce their usual work schedule by four hours during that week, so that total weekly hours worked stay below 40,” says Sherman.

Sherman offers one caveat: Always check your state wage and hour laws. California, for example, requires that overtime be paid if an employee works more than eight hours on any one day, even if the total weekly hours remains under 40.